Reporting Scope 2019
H&M Group produces an annual sustainability performance report that covers sustainability strategies, challenges, activities, goals and performance for the global group operations of H & M Hennes & Mauritz AB (also called referred to as the H&M Group). The report includes eight H & M Group brands (& Other Stories, Afound, ARKET, COS, H&M, H&M Home, Monki, Weekday), as well as its wholly or partially-owned subsidiaries globally during our financial year from 1 December 2018 to 30 November 2019, unless stated otherwise. Data does not include Sellpy, which we bought a majority stake in partway through the financial year. See our Annual Report 2019 for a full list of entities.
Wherever possible, we report how we are addressing our key positive and negative impacts across our value chain. Our sustainability teams collect data from functions within H&M Group and from external parties such as suppliers and implementation partners. We include data, unless otherwise stated, only from business partners and supplier factories active and approved for production during the reporting period. We include the following factories in our scope:
- Manufacturing and processing (i.e. washing or dyeing) factories owned or subcontracted by our suppliers.
- Where stated, a select number of our suppliers' own suppliers (i.e. fabric mills, fibre processors, spinners or tanneries) and suppliers for non-commercial goods (such as store interior suppliers). Of these, most are fabric and yarn suppliers that account for about 60% of our products.
We state when information is limited in scope in our operations, across our value chain and for specific brands. Unless otherwise stated, we do not cover franchise operations.
Top executive management review our reports, and external assurance is performed for selected indicators (clearly marked where applicable, and in regard to materiality and stakeholder engagement). Data is reviewed by our internal controlling team, and by internal sustainability experts following a two-tier quality control principle. We clearly indicate any extrapolations or estimations, as well as any changes in data methodologies or scopes that may influence data comparability between years. We base our data on the best possible systems currently available to us and, where applicable, align it with recognised standards.
Our 2019 data
There are continued improvements in data systems, methodologies and scientific uncertainties. So while our GHG emissions accounting and reporting is aligned with the GHG Protocol, the emission factors we use are from publicly-available sources such as the International Energy Agency (IEA 2017), the Network for Transport Measures (NTM), Reliable Disclosure System for Europe (RE-DISS) and supplier-specified emission factors. The global warming potential (GWP) factors used in the calculation of CO2e are based on the IPCC’s Fifth Assessment Report (AR4) over a 100-year period.
We are continually working on improving data quality and precision by replacing calculations based on secondary data, with primary data. The scientific knowledge used to determine emission factors is incomplete, which means GHG emission data, as with other data, is subject to inherent uncertainties that ultimately affect all measurements and estimations. Our reported energy usage is based on invoiced data, data from real-time electricity meters and data as reported by transport providers. We convert between fuel usage and energy content using energy values specified by the supplier or by using tabled values provided by national bodies. As we gain visibility throughout our supply chain through collaboration with the Sustainable Apparel Coalition, scope 3 GHG emissions are adjusted to match the highest quality data and the most up to date assumptions in the industry. We will continue to be transparent on how we calculate, learn and adapt our approach as methods improve.
We are required to make certain assumptions about waste factors, weight per sizes, etc. for our material reporting. We are continually working to improve those aspects of reporting, which may lead to minor updates and changes in accuracy to our yearly material consumption reporting, as well as changes to our data systems.
We report monetary amounts mainly in the currency of transaction. Additional currency values are conversions as approximate figures based on the conversion rate on 30 November 2019, unless stated otherwise. We provide additional information on the sustainability pages of this website, and in our financial and corporate governance reporting. Our most recent sustainability report was published in April 2019.
- Global Reporting Initiative (GRI). We prepare our sustainability report in accordance with the GRI Standards: Core Option. Download our detailed 2019 GRI index.
- UN Guiding Principles Reporting Framework. We were one of the first companies globally to report on human rights in line with the UN Guiding Principles Reporting Framework. Read more about our approach. Our regular review of salient human rights issues complements our materiality assessment.
- Task Force on Climate-Related Financial Disclosures (TCFD). Our risk assessment follows the Task Force on Climate-Related Financial Disclosures (TCFD) recommendations. Read our full TCFD disclosure.
- UN Global Compact and CEO Water Mandate. We are signatories to the UN Global Compact. Our annual sustainability report serves as our Communication on Progress (COP) for the UN Global Compact and the CEO Water Mandate.
Process for identifying the most material topics and their boundaries
1. Identification: Mapping aspects and creating a gross list
We conduct an annual review of our gross list of aspects. This is based on an analysis of external standards, such as the GRI Standard topic list, legislation, investor and NGO questionnaires, peer reviews, business intelligence, lifecycle assessment results, stakeholder dialogues and stakeholder reports, and media coverage. The gross list has been checked against GRI’s Sustainability Context and Stakeholder Inclusiveness tests most recently in 2019.
2. Prioritisation: Scoring and prioritising topics
We prioritise the most material topics from this gross list by scoring different aspects on their frequency (how often they are raised by stakeholders) and their significance for economic, environmental and social impacts. We then break these categories down further. For frequency, we look at frequency raised by key defined sustainability stakeholders and experts (weighted x3), frequency featured in media (weighted x1) and frequency raised in key sustainability benchmarks, rankings and indices (weighted x1). For impact, we look at social and environmental impacts (weighted x1) and importance to business strategy (weighted x2). At least two internal experts per category gave scores, which were based on lifecycle assessment (LCA) data and existing strategy documents. We also chose at least one representative from each of our key stakeholder groups (which includes customers, colleagues, communities, suppliers and their employees, industry peers, NGOs, IGOs, policymakers and investors). We asked eleven stakeholder representatives to feedback on our materiality matrix.
3. Regular review of our materiality matrix with key stakeholders
We review our materiality matrix on an annual basis. This can mean conducting a full materiality analysis (as conducted in 2016 and 2019) as described in points 1 and 2 or a review of previous year’s matrix considering feedback received.
Read our independently verified assurance statement in the annual Sustainability Report 2019 to find out more about how we define our report content and a list of material topics.